O-I Glass, Inc. (OI) Earnings Call Transcript & Summary

Welcome, and joining us for our next morning session is Andres Lopez, CEO of O-I Glass and joining him John Haudrich, CFO. Andres, I'll turn it over to you to say a few words about O-I and then we'll move into our questions, and we'll have time for questions from the audience.

Thank you. Good morning, everyone. Thank you, Anthony and the Citi team for hosting us today. John and I want to discuss how O-I represent an attractive investment opportunity as well as provide an update on our business outlook. Afterwards, we'll be happy to take your questions. Before we proceed, please review the safe harbor comments on Slide 2 and the various disclosures found in our presentation, which is posted on our website. On Slide 3, you will see a high-level profile for the company. O-I is the global leader in glass packaging. We serve a highly stable and steadily growing [indiscernible] industries for more than 6,000 customers. These customers value the occasion to service and our own parallel production network to meet their needs across the globe. As the industry leader innovation, we are proud to make Glass the most sustainable packaging solution. By wise, it is the preferred substrate by most consumers, given its premium characteristics and their increased focus on health and wellness. O-I passed an inflection point in this long corporate history. We have achieved a third and final resolution of our legacy asbestos-related liabilities following pallet from Chapter 11 protection in July. As such, we expect to generate substantially more cash flow this year that will be deployed to span our business, reduce debt and create value for our shareholders. At the same time, we are developing MAGMA, a revolutionary new glass production process that will element profitable growth and boost our financial performance. Let me expand on this strategy starting on Page 4. I strongly believe O-I represents an attractive investment opportunity. As previously mentioned, we are dramatically reducing the risk profile of the enterprise. At the same time, the company is executing very well supported by solid capabilities we build over the last few years and both actions we are taking to transform O-I. As proof, our results have consistently either met or exceeded consensus over the past 11 quarters. We are enabling profitable growth by capitalizing on the strongest glass fundamentals in decades. MAGMA represents a breakthrough innovation that creates a new paradigm for Glass to meet the needs of an evolving market and expand our business. Finally, as the most sustainable packaging option, glass is set to win in the new green economy. Let's expand on each aspect of our strategy a bit more. We're now on Page 5. We have dramatically improved our balance sheet position and reduce our risk profile. As noted, we have resolved our legacy asbestos liabilities during the last quarter and we have made greatest price reviews in our unfunded pension liability, which should be eliminated by 2024. In August, we completed our portfolio optimization program as proceeds from asset sales have been used to reduce debt and prefund our expansion program through 2024. As illustrated on the chart, we have made significant progress reducing our total financial leverage, which we expect will be in the mid-3s by year-end. Finally, our progress has been recognized by the rating agencies as both Moody's and S&P upgraded O-I's credit rating to BB during the third quarter. I'm now on Slide 6. We have also been hard at work transforming the company. The team started by building a simple, added, capable and effective organization. We are optimizing our structure. As discussed, we recently completed our asset sale and [indiscernible] result is legacy investor liabilities. We are most competitive as a result of our margin expansion initiatives which have generated $250 million of benefits over the last few years. Ongoing initiatives are expected to yield at least $50 million of benefits annually. As a result of these efforts, O-I has been able to overcome elevated market volatility, reduce that and increase our adjusted free cash flow conversion to nearly 35%. Now we are squarely focused on advancing MAGMA, which will enable a more flexible, scalable and sustainable production capability as well as increase our supply chain efficiency. All this will support profitable growth. Moving to Slide 7. Market trends favor class, resulting in the strongest market fundamentals in 20 years. We have listed a number of key factors on the left, including consumers, increased preference for premium and healthy products, structural market shifts and our [ salt ] conditions amid strong demand in several key markets. As illustrated on the right, glass demand is expected to grow around 2% to 4% a year in the key markets we serve over the next 3 years. Turning to Page 8. O-I is hard at work, translating favorable market conditions into future profitable growth. As shown on the left, O-I's historic shipment trends illustrate improved momentum given a strong glass fundamentals. Volumes were up more than 5% last year and up around 2.5% year-to-date. This is in line with our expectations given record low inventory levels and significant capacity constraints in key markets. We continue to advance our capital expansion projects to add much needed new capacity starting in early 2023. Our capital expansion plan is shown on the right. This program will enable new capacity to support 5% to 6% profitable growth through 2024 with an average IRR of around 20%. As you can see, Glass is a growing attractive market and O-I is hard at work enabling future profitable growth. On Slide 9, you see the key benefits of MAGMA, which is O-I's new proprietary glass production system leveraging new rates of technology. Our Heritage network is a great fit for many of the categories we have served for decades and will continue to serve into the future. Given the trends of health, wellness and sustainability, there are significant future opportunities in a broader rate of end-use categories, which tend to be more differentiated on fragmented. MAGMA is a perfect fit to expand in these categories. MAGMA is more flexible, scalable and can be more rapidly deployed. It can be co-located to improve supply chain efficiency. It is more cost effective with lower capital intensity. Likewise, MAGMA can be used with Ultra to allow significant container light weighting and MAGMA will enable future use of carbon-free energy sources like hydrogen or biofuels. So it increases convenience and sustainability. MAGMA represents a major leap forward in how glass is produced and will expand O-I's right to win in this addressable markets. Overall, we are targeting returns in excess of 20% for future MAGMA expansion projects. Moving to Page 10. We are very excited about our first MAGMA Greenfield plant in Bowling Green, Kentucky, which is on track for initial commercialization in mid-2024. We are designing the plant to be a showcase facility that will demonstrate all of our next-generation capabilities. This U.S. state-of-the-art facility will include the MAGMA melter, New modular badge system and pilot forming machines. It will be fully digitized and with a high-performance operational model. This highly scalable plan will eventually include all MAGMA Generation 1, Generation 2, Generation 3 solutions with the next-generation sustainability features as well as Ultra light weighting system located in the Bourbon trail, the Bowling Green plant will demonstrate the value of near location and will be a key hub for future customer collaboration, investor visits, and demonstration of O-I's next-generation capabilities. Sustainability is another critical element of our strategy as Glass is set to win in the new green economy. I encourage all of you to take a look at our updated sustainability report which can be found on the company's website. You can see a few highlights on Page 11. We are already more than halfway to our 2030 emissions reduction target and are implementing new technologies to further view CO2. Renewable energy now represents more than 27% of our energy source, and we are well on our way to our 2030 goal. By wise, we are expanding recycling collection sites and our recent green bond help fund numerous projects to expand [ colic ] uses. MAGMA and Ultra will also provide significant sustainability benefits in the future. Overall, we're making solid progress. Glass is already the more sustainable packaging solution, and I believe you will be hard-pressed to find many industrial companies with so many levers to further improve their sustainability position. Let me turn it over to John to discuss objectives and outlook.

Thanks, Andres, and good morning, everyone. On Slide 12, we've laid out our key objectives for 2022 that we believe fully align with our strategy to increase shareholder value. Segment profits are up 100 basis points year-to-date, reflecting strong net price realization for the business and very good progress on our margin expansion initiatives. As noted, our expansion projects are progressing well as we capitalize on the strongest glass fundamentals in about 20 years. . As all MAGMA development efforts are advancing well, and we're excited, as Andres mentioned, for our first MAGMA Greenfield in Kentucky in mid-2024. Likewise, we're preparing our new Ultra light weighting solution for full-scale market trials starting this quarter down in Colombia. Our ESG and glass advocacy efforts are also progressing well. And as discussed, we wrapped up our portfolio optimization and [ panic ] resolved as legacy asbestos liabilities. Overall we're making excellent progress on our key strategic objectives. On Page 13, we recapped our most current business outlook as presented during our third quarter earnings call. As you probably noted, our third quarter results exceeded guidance led by very good price realization. Reflecting good business momentum, we remain on track to achieve our recently updated fourth quarter and full year guidance. Likewise, we expect continued progress in 2023 and we did recently introduce some preliminary things for next year. Naturally, we intend to provide more specific earnings cash flow and CapEx guidance during our next earnings call. But overall, we expect next year earnings will be at least flat or likely up from 2022 levels despite a $0.25 per share headwind from FX and additional interest on funding hepatic trust. This indicates strong double-digit core earnings improvement after adjusting for these particular items. Finally, we remain on track or ahead of pace to meet our 2024 Investor Day targets that we presented last year. Let me outline our current capital allocation principles. I'm now on Page 14. Reflecting the best glass fundamentals in a generation. Our top priority remains investing in organic growth, ultimately enabled by MAGMA, which drives profitable top line growth, higher margins and greater cash flows. Continued balance sheet improvement is our next priority. We are making good progress and are set to achieve our 2024 [ IDA ] leverage targets by the end of this year in 2022, well ahead of schedule. Given the higher interest rate environment, we intend to further reduce leverage to below 3x over the next 1 to 2 years. Finally, we will evaluate the return of capital to shareholders, which may enhance as our balance sheet position improves. Let's turn to Page 15. O-I is a much more agile and resilient. Companies continue to navigate elevated market volatility, including a challenging energy situation in Europe and, of course, the potential recessionary pressure. We have the strongest balance sheet in years and cash flow conversion is up significantly after the resolution of legacy asbestos liabilities. O-I serves a global food and beverage market, which is more recession resistant than [indiscernible] businesses. Likewise, our business mix has improved over the years as we shift to more attractive end-use segments. And U.S. mega beer now represents only 3% of global volumes. Importantly, we are significantly oversold in key markets across Latin America and Europe, which provides a buffer from potential recession volatility. O-I is well positioned to manage Russian natural gas [ repayments ] as we enable energy switching capabilities across about half of our EU network by around year-end. While Russia has curtailed LNG, EU storage levels are around 94% across the continent and well ahead of schedule, reflecting very good efforts to reduce gas consumption across the continent. Finally, we have consistently demonstrated feasibility as did significant market disruption since 2020. Let's turn to Page 16 for some concluding remarks. First, O-I has a clear strategy to create value, and we have consistently taken the bold actions to advance our transformation. The company is performing well, and our business outlook continues to improve. As Andres mentioned earlier, the third quarter represents the 11th consecutive quarter we have either met or exceeded expectations. Likewise, O-I is a much more agile and resilient company as we continue to successfully navigate elevated market uncertainty. Finally, I believe O-I represents an attractive investment opportunity as we reduce our risk profile, execute our transformation program, enable profitable growth, advanced breakthrough innovations like MAGMA and Ultra and further leverage the sustainability position to win in the new green economy. We are confident that this strategy will create value for all stakeholders. Thanks for your interest in O-I Glass, and Anthony, back to you.

All right. Thank you, Andres. Thank you, John. It was extremely helpful overview, and you outlined some expectations for '23. And I'm wondering if you could talk about that in a little bit more detail. In terms of the key drivers and the level of confidence, maybe we can just start with volume and then price cost. If you could talk about those 2 those 2 drivers kind of going into '23.

Yes. So the demand fundamentals for glass are quite solid. They have changed over time. They differ significantly from 10 years ago or so or even 13, 14 years ago. When we look at the various markets, the European market is in a very solid [ food ]. Champagne is back, reposition an alternative to Prosecco is in place, which is doing extremely well in global markets, all of them. Bordeaux wine is back. The Italian wine is performing really, really well. Demand in beer in very critical markets for us, like France and Italy is very strong and very solid in all senses. When we look at Latin America, there is significant growth taking place. We are expanding, but even with that, it's difficult to keep up with the pace of those markets. The reason for that is multiple. One of them being -- they've been developing the premium category of products, which was extremely small in those markets and has a significant potential for growth over the last few years. So they've been doing that. Now they're working on localizing all of that. So the demand already exists, but we need to withstand to be able to produce that locally for them to product locally and that makes it quite sustainable. There is a significant conversion from returnable to 1 way for those consumption occasions in which a one-way container is good, right? And in those applications, we have a very strong presence. So you know that for every 25, 30 transactions in the market, 1 barrel can cover in the returnable system. In this case, every transaction needs a bottle, a new bottle. So the volume coming out of that is very, very large. When we look at the North America market, we've been diversifying into new categories for us or, let's say, stronger categories because they present growth, like [ food ], like NABs, like spirits and premium wine. So our exposure to beer is a little less. So as we look into 2023, all that is playing out. So it is solid fundamentals for volume, and it's our change in mix in the entire company. We believe we're going to be able to once again get positive net price. As we said a year ago, we were going through it. We did it. This time, we can say with the same confidence we're going to do it is in 2023, too. John, anything?

Yes, sure. Maybe to expand on that net price component of it. As we look to the gross price realization next year, obviously, we have the annual effect of the price increases that we've done this year. As you probably know, 55% of our business is under long-term contracts, and those include price adjustment formulas that generally speaking, kick in January 1, and they're tied to some type of PPI or actual realized costs that we have. So there'll be a big boost there. And of course, depending on the competitive environment, what other additional price actions over next year. We'll have to see where that plays out. . But the same token, of course, we're still seeing an elevated energy. I mean, an elevated cost inflation environment. But we do have, we believe, a very strong competitive advantage on energy in Europe, and we've talked about that in the past. Before the pandemic came into play, we had entered into long-term energy contracts that even from this point forward are long term in nature at what we believe is a highly competitive and attractive price position. So the combination of the competitive environment of the price as well as our competitive advantage on the energy positions that remains on a long-term basis, we're highly confident of a strong net price continuing next year.

Yes. And perhaps one more point to add is we've been executing on margin expansion initiatives for several years now is very well structured. We expect those kind of things to continue again into the following years in 2023 and '23 is going to be the first year with [ legacy ] asbestos liability, which makes a major difference for this company after decades of being subject to.

Maybe just digging deeper on the volume piece. As you talk about Americas, I mean, you're sold out in Americas, do you have a sense of if you weren't sold out sort of what underlying demand is? And then all the management teams that we're talking to, a lot of them have too many inventories and their customers have way too much inventory. What is the sort of inventory dynamic look like in glass bottles in the Americas? It seems like not necessarily seeing that problem. But...

Yes. So from a supply demand perspective across Latin America, we're oversold, it's a double-digit oversold position. okay? And it goes back to what Andres was talking about earlier as brands are getting localized and the big customers are putting in turning regional brands in the global brands -- those are going into one-way containers down in Latin America of more premium categories. And as a result, we're oversold, okay? So it's a double-digit position. It's a little bit more balanced in North America here and things like that. And over in Europe, we're probably oversold by about 5% because of what was historically volume coming in from Ukraine and Russia, not to mention other actions, other people taking given energy positions in today's world. So in both of those markets, we're quite oversold, creating quite a good strong buffer in case there were recessionary pressures as we put in our [indiscernible]. And across the board, our inventories are at record low loans. And we were talking about that earlier, it's probably down 20%, 30% on an IDS basis over the last. So we're [indiscernible].

And in terms of O-I's kind of historical volume trajectory, you've had periods where you've seen volumes decline and you talked about the decline in mass beer is maybe driving that historically. Do you think O-I was maybe growing with the market or maybe losing some share growing under the market, were you able with the big -- the pension issues, and the asbestos issues and all that were you able to kind of keep up with the market. I'm just...

Well, with the capital allocation that we described, certainly going forward, we're growing ahead of the market, right? That's the position now. When we look back to 2008, 2009, for example, which is one of the times or periods of time when there was a decline in our case. The fundamentals of that time are very different than when compared to the fundamentals of today. At that point in time, this industry was considering secular decline. If you look at all the data available about glass industry, it is growing. And it's growing across all markets. It's the case. For me, the growth of glass is limited by investment in new capacity. It's not because of the fundamentals of the industry per se.

I would just add, I mean, over the last 10 years, it is amazing how many projects we ended up having to say no to as far as opportunities to expand and invest with their customers because of those capital limitations. So I do believe that we will probably not representative of what the underlying demand was because of the capital constraints of the business. But I think if you go back a decade ago, demand glass is probably growing 1% to 2%, something like that. Now as we talked about before, maybe 1.7% to 3.5%. So it's definitely stepped up from what it was in the past.

And we are the leader in glass packaging in the world. With this company now having 100% of the free cash flow available to create value is a very different ball game.

And I mean you touched upon this in your prepared remarks. But in terms of thinking about the mix evolution prepandemic in sort of post pandemic, can you sort of recap Europe and Americas were...

So let me just talk about North America. Back in 2016, we said we are going to change the mix of this market. And we've been doing so since then. So it's prepandemic and it continue after the pandemic. So it's not related to that. But the same work has been done in Europe, and that's why you see, one of the reasons why you see the margins in Europe improving consistently since then. And the same is happening in the Latin American markets because those markets are focused on premium products, where glass has a very strong presence.

Yes, I was looking at the information. I believe if you go back 10 years ago, North America mass beer is about 40% or so of our mix. Now it's down to about [ 14% ], and that represents about 3% globally. And that is -- we've actively been doing 35% or so of our beer capacity flipped over these other categories, spirits, food, lines and things like that to be able to move ourselves into a better mix profile, which also reduces our risk to potential recessionary pressures and everything like that.

Maybe last question on volumes. I mean some of the beverage packagers that we talked to have cited lower promotional activity by some of the big brand owners as being a headwind this year maybe that's limited to beer. I don't know what your perspective is there, but have you seen that? Or do you -- how is that going?

Well, the -- we play in very different lanes when compared to aluminum containers. And I think a lot of the comments that they might make to the market don't necessarily describe what goes on in glass. And when you see their growth is driven by energy drinks, carbonated soft drinks, bottle water and things like that, things in which we don't play. Our growth is driven by premium products in all categories, which is a very different set of fundamentals. When you look at the spirits when we are in that market, that's not where they are. So there are fundamental differences. We play in different lanes. That's pretty much it.

If you go back to even the last recession, those more luxury categories actually quite well. They're affordable luxury, the backdrop, a more challenging certain things overall. And so as we go forward, I mean we're more levered to take those categories and historically, those producers actually do quite well because of the ability to have the afford the luxury.

And then maybe just shifting gears to price cost. I mean, you referenced this earlier, but I think in Europe, you have three pricing initiatives to offset energy costs? And can you just talk about the pricing environment into '23, you've seen your customers in the U.S. [ elasticity ] with pricing or just how you can [indiscernible].

Well, we have seen very little elasticity so far. I think the major concern is about supply and securing that supply. And in the segments in which we are playing and driving our growth, that's really where -- this is happening. They're growing. And their products are less and less sensitive to recession as when compared to commodity products. So we haven't seen elasticity. We haven't -- we are not hearing about any of it. That's why we believe we're walking into another year of net price positive .

And then in Americas, where the -- I mean, energy situation is a little bit different. How do you...

Well, we are performing according to those levels of energy. So Europe obviously is higher, here is lower, but in all cases, it's net positive for us.

And we did indicate during our last [indiscernible], for example, in North America, we are focused on a price recovery position given the last decade that some dynamics going on those marketplaces. So that activity is underway.

And maybe just a question on operations. I mean, Andres, if I look at the longer history of O-I, it seems like whenever there were issues with supply chain, maybe O-I got hit more than them or yours, and it's a high fixed cost business and it's a global business. The last couple of years, we've had sort of the mother of all supply chain issues and you just -- you're outperforming. So what -- you've been with the company for a long time.

Many things have changed in this company. And capabilities in every one of the critical functions to be able to deal with that have changed materially. It's a different company. IBP, we mentioned that many times in Integrated Business Planning which is a 3-year running planning system, changes how you can run a company like this. And obviously, our ability to respond to all these fluctuations is totally different. So there is an underlying set of fundamentals that have made this company more capable, more agile, and stronger. And that's what we're seeing. I mean in the periods of the largest disruption is when O-I has performed the best. So it is for a reason. And it's all the structural change we worked on, which took time. It took time because it's a lot of change that we needed to have.

I'd add another thing that what was very important is we did change our organization structure around. We simplify, we [indiscernible] there the ability to have direct connection between the top of the house to the operations, the countries that are really running the business is a lot better than it ever was because we take decisions much quicker if you're aware of what's happening to reallocate resources to be able to help us when it comes up, a lot different than it was 5 years ago.

And you talked about MAGMA is potentially enhancing that agility going forward? And can you talk a little bit about maybe the return profile of MAGMA and then you had sort of the revision of the capital plan earlier this year? Can you just kind of touch upon that [indiscernible].

Yes. So the capital plan was reviewed because given the supply chain disruptions, all time lines were out the window. And if we wanted to be able to match markets, we needed to go down a different route, which is simpler, easier to implement projects rather than large greenfields. Now at the same time, because of all those complexities, we could do better by focusing the organization on developing Generation 2 and 3 and getting on time with the original time lines for deployment than deluding the organization by putting it to implement multiple projects under those conditions. And it's working for us, right? Because we're going to have these 2 lines in the United States, which is a critical market in place by '24 and '25, and we are following all these time lines without a problem. Returns, we mentioned then.

Yes. I mean we're looking to get up to 40% lower capital intensity out of MAGMA. I mean you saw the that we had on the slide there. I mean it's going to ultimately fit an industrial warehouse when we go to Gen 3 as opposed to the big historic smoke stack factory. The amount of steel, amount of concrete, the amount of all the infrastructure that you historically needed in a big industrial site is going to be moved to more of an industrial warehouse type of environment. So that's really important for our business, right, because it's such a capital intensity. It will move our fixed variable from 50-50 to 2/3, 1/3, 2/3 on the variable side and 1/3 on the fixed side. All those are really important. It provides the operating flexibility as the on/off switch. There's a lot of cost tractive lack of flexibility when the product lines are changing as they've done in the last decade where there's 20x as many brands on the store shelves today, then there was a decade ago when you used to have long-run beer bottles all day long. So those types of activities, ultimately, we believe, allow us to bridge, for example, 50% to 75% of the operating cost between currently a glass model [indiscernible]. So we aren't providing more details than that. But we are seeing a 20% plus returns on these types of projects where maybe historically on a greenfield glass factory, maybe is 12, 13 types of percent to give you a kind of perspective in the range of returns and I think we can do better, it's certainly better .

Yes. Something important is the speed of deployment because ultimately, this is going to be off the shelf. So putting capacity in place is going to have half the time of today. And with the potential of glass getting to realize that potential is extremely important, right? So calling the deployment timing have is going to make a material difference, being able to co-locate is going to make all the difference. It will be more. If markets move, we can move with the market. It's a very different set of fundamentals and business model, but we can build under that.

And you did ask a question about the change, right? I mean, so we did have an original plan that we shared during our Investor Day. We did update that plan and change it again showing some of the resilience and agility that we were talking about. But in a world where the supply chain issues are what they are, and we're getting into new technology, different supply chains we're going to have to deal with compared to the store and understanding that hosts growth that we have is contracted business with existing customers. We thought it was appropriate to change and use the heritage technology facing those deadlines associated with making sure that we can honor those commercial commitments. . So at the end of the day, I think we believe the plan we have right now actually gets us in a better place at the [ difference ] 3 years than the original one. We were going to do up to 11 plants, 11 MAGMA lines that are more like the earliest generation. But now we're going to have Holzminden in Germany and Kentucky. But for example, in Kentucky, we're going to take it all the way to Gen 3 with all the bells and roles we were talking about. So we believe proof of concept of all those things ultimately going into 2026. We're going to be better placed than we thought before as we put words [indiscernible]

And you talked about the competitiveness versus the can versus PET from a cost perspective with MAGMA. Can you talk a little bit about ESG? And when I think about sustainability, maybe in Europe, there's a view that glass is extremely green and you have high collection rates and the U.S. is maybe in a different place. Can you just talk about sort of sustainability profile .

Yes. I think Europe demonstrates the potential of glass. The United States is an opportunity. And the world is changing. A few years ago, if we were to talk about these topics and talk to parties about installing capacity for glass recycling or investing in the front, you wouldn't really get any audience for that. Today, we do. If you were to talk to governments about it, we wouldn't get that much audience here today, we do. And the interesting thing is we have the example of Europe, we have lived through it. We already saw that. So we -- that's a collection of learnings that we can use to be able to develop this market. Now as we mentioned before, MAGMA has been developed for the use of hydrogen and biofuels, which also make it a completely different story from an emissions standpoint. Ultra is a very important project. And this quarter, we're testing for the first time in industrial products to commercialize those bottles with the first phase of that. Getting that project to completion is going to change the ability to reduce weight in glass containers. If we can go up to 30% reduction, which package out there can reduce weight up to 30% reduction going forward. I don't think there is one.

Yes. I mean, if you throw in co-locating, taking up to 30% of the weight out, getting the coat and recycled content and you take -- get hydrogen biofuels that actually could ultimately take out 95% of the greenhouse gas emissions. Now will that happen overnight? No. But when we said before about we believe we got more levered than you realize about the ability to transform a product that has so many green characteristics in the natural aspect of it and the fact that it's never tracked and then change our manufacturing process to really take in-house. We're talking about a different solution .

Yes. And as we develop for MAGMA, for all those things that have application with retrofit into [indiscernible]. So not only we're developing the future technology, we're developing solutions for the current.

And when we have Bowling Green, the Kentucky operation, we'll be able to see it all. So we're building it all so that we can have that operation demonstrate all those capabilities.

We're coming up on time. I don't know if there's any questions from the room. I guess maybe just sort of one last one for me to kind of wrap it up. I mean you've executed extremely well. You've made a lot of fundamental changes and asbestos was a huge kind of [ off your that's off your back ]. You have a view on volumes that I think is much more positive than a lot of the companies that we're talking to today. The stock trades at a relatively low multiple. Like what do you think is misunderstood most about O-I or about the story, the questions that you get as you talk to investors?

Well, I think the investors are going to continue to build confidence O-I. And what we're doing by executing and delivering on what we say is building that. We're dealing with decades of challenges, right? You mentioned that, that's reality. Now what we've done with this company is showing a very different profile. So we're confident over time people realize the potential. And then all the circumstances would change. Well, this year is an example of that. We're well ahead of market. .

Definitely, definitely. Well, Andres, thank you. John, thank you.

Thank you. Appreciate it. Thanks, everyone.

Thank you.